NEW YORK (Reuters) – Private equity firm Blackstone Group (BX.N) plans to sell bonds in the private placement market through a unit called Blackstone Holdings Finance, the firm said on Wednesday.
The issue is expected to have a 10-year maturity, with pricing expected as soon as possible, according to IFR, a Thomson Reuters service.
It is Blackstone’s first bond sale, according to Thomson Reuters data.
Blackstone, the first major U.S. private equity firm to become publicly traded when it listed in June 2007, said proceeds will be used for general corporate purposes.
Companies have been taking advantage of falling borrowing costs to stockpile cash while interest rates are relatively low and credit markets are rebounding. They typically use the funds for acquisitions, capital expenditures or refinancing debt that comes due in future years.
Blackstone, which bought hedge fund business GSO Capital in 2008, has said in the past it sees longer-term opportunities to make acquisitions, and sees consolidation in the alternative asset management industry.
Borrowing costs have fallen for corporate bond issuers as signs of healing in the economy and credit markets have boosted investor demand for corporate debt.
Average yields on corporate bonds have fallen to 5.505 percent from 8.505 percent at the start of the year, according to data from Bank of America’s Merrill Lynch — the lowest yield since February 2008.
Credit rating agency Standard & Poor’s Ratings Services earlier this year assigned an A long-term counterparty credit rating to Blackstone and Fitch Ratings this week assigned it an A-plus long-term issuer default rating. An A rating is the sixth-highest investment grade, while A-plus is the fifth-highest. (Reporting by Dena Aubin and Megan Davies; Editing by Dan Grebler)